February 8, 2007

By Diane Chiddister

The final draft of the impact analysis of the Fogg farm annexation, presented at last week’s Jan. 29 special Village Council meeting, offers what Village staff hopes is information that will help villagers and Council weigh the costs and benefits to the Village of the possible annexation of the 40-acre Fogg farm on the western edge of the village.

However, even in its first public appearance Jan. 29, the study illustrated the difficulties that planners, in this case the Cincinnati planning firm of Edwards and Kelcey, have when attempting to accurately predict the future.

Numbers have changed
The study predicted that the annexation, described by the property owner last week as having about 210 homes, would provide new annual revenue to the Village of about $163,680 in income and property taxes, compared to costs of $49,912. However, Edwards and Kelcey used figures based on recent housing sales, estimating that home prices would range from about $240,000 to about $330,000. But at the meeting, Fogg farm owner Doug Miller stated that the development would include “a good percentage” of homes between $140,000 to $175,000, since there seems a greater market demand in Yellow Springs for more affordable homes.

Consequently, several villagers noted at the meeting, the study’s projected income tax and property tax figures seemed too high; Village revenues from lower-priced homes would be lower.

“There was a disconnect between the report and the owner, what they were talking about,” said Stan Bernstein this week. At the meeting, Bernstein was one of those who expressed concern about the inaccurate numbers.

Bernstein also questioned the figures Edwards and Kelcey used to estimate the income tax revenues of new homeowners based on the assumption that each household would have an income of about $75,000. But that figure is significantly higher than the median income of area homeowners, according to Bernstein.

No tax cut
The study also inaccurately states the economic impact to villagers of the Fogg farm annexation, according to Greene County Auditor Luwanna Delaney in an interview Monday. The study states that the annexation would yield $141,120 to the Village for the new construction in its first year only, and after that, the property taxes would join the pool of Village property taxes in raising the $743,000 annual income of the recently-passed 8.4 mill levy. Consequently, the study says, local homeowners would pay lower property taxes due to the new construction.

But that’s not accurate, according to Delaney. Rather, the Village will receive the $743,000 raised by the levy plus the property tax revenues from the new homes, and villagers will continue to pay their current level of property taxes. The only way property taxes get lowered, she said, is if the county reassesses a home to a lower value or if a homeowner destroys a structure.

To villager Paulette Olson, an economist who teaches at Wright State University, a cost/benefit analysis is almost always inaccurate.

“Even the most sophisticated cost benefit analysis cannot predict the impact of development with any degree of certainty,” she said. “Because the future is uncertain, the true cost/ benefits will not be revealed until after annexation.”

The Village Greene
The Fogg farm is located west of Yellow Springs High School on Dayton-Yellow Springs Road. Having previously stated that he would annex the land and then find someone else to develop it, Miller stated Jan. 29 that he had decided to develop the property himself. He and designer Joe Roller presented specifics on their proposed development, which they named The Village Greene. The development, a planned unit development, or PUD, would include about 150 attached multi-family units and about 60 attached single-family units, along with a bike path and some common green space, Roller said.

Village Council has until its April 16 regular meeting to make a decision on the annexation request, according to state law, since Miller made an expedited annexation request. The shortened timeline affected the thoroughness of the annexation study, according to Paul Culter of Edwards and Kelcey, who wrote most of the study, with input from the Village staff on costs.

Asked this week about how he would rate the report’s accuracy, Culter stated that it is “very accurate based on the time we had to put it together.”

Culter estimated that he spent about 50 hours altogether over a two-month period on the report. In an earlier conversation, he stated that most cost/benefit analyses require about four to six months of work.

Response to concerns
Village staff released the first draft of the cost/benefit analysis in early January, with a request that interested villagers make written comments on the draft. The purpose of the community feedback was to help shape the final report to one that reflected the concerns of villagers, according to Village Manager Eric Swansen.

Some villagers who offered comments to the first draft felt that the final draft did reflect their concerns. Some of the almost 25 villagers who commented had expressed concerns about the study’s original conclusion that the annexation would provide the Village significant financial benefits at little cost, a conclusion at odds with most studies of residential development, which show that municipalities most often lose money on those developments.

But the final draft did show numbers which seemed more realistic, according to villager Mary White. Rather than anticipated extra annual revenues of $304,800, the study identified the annual financial benefit to the Village as $141,120. And rather than the first draft’s estimated costs of about $9,820 to the Village, the final draft forecasted Village costs at about $49,912.

But the large difference in cost estimates between the first and final draft seemed troubling, White said.

“If the cost/benefit analysis is that variable, who knows what the reality is, and what additional factors currently neglected may factor into it?” she wrote in an e-mail.

The final draft of the analysis did respond to the most significant questions and concerns about the annexation raised by villagers, according to Village Manager Eric Swansen.

The study addressed “most of the questions raised of a substantive nature,” he said in an interview this week. “Those that weren’t addressed were more emotional.”

However, members of the Village Environmental Commission felt that many of the concerns they raised were not addressed, according to EC member Chad Runyon this week.

“A lot of the questions were left” in the final draft, he said. “It felt like not much had changed.”

For instance, he said, EC members, along with several others who made written comments on the report, asked for the final draft of the study to address the annexation’s effect on Council’s stated goal of enhancing bikability and walkability in the village. However, the final draft of the study did not address that question.

Addressing that issue in the final draft of the report was not appropriate because many questions about the annexation’s effects on bikability are not clear, Swansen said.

“We’d be spinning our wheels and wasting our money if we were getting to that level of specificity” when the final annexation plans remained unknown, he said.

Electric system concerns
While the study’s final draft addressed some of the questions raised, it did not address her concern with the annexation’s effect on the Village’s electrical system, according to Village Council member Judith Hempfling. Specifically, she said, the study did not quantify how the influx of 400 new residents might affect the already at capacity electrical substation, and if the annexation would “force the hand” of the Village to purchase a new $3.5 million substation, which Swansen has recommended to Council. However, Council has not approved the purchase of the substation, and some villagers, including Hempfling, have questioned whether increased conservation efforts could preclude the need for the Village to make such a financial investment.

In response, Swansen stated that the electrical system discussion should be divided into two parts, with the first part addressing moving ahead with plans for a new substation and the second part addressing the possibilities of conservation efforts.

Moving ahead with planning a new substation should be “fast-tracked,” Swansen said, because summer is coming and last summer the Village reached its peak capacity several times. The electrical substation issue is especially compelling, he said, “because of the life-threatening nature” of the issue, and the possible health consequences if the Village’s electrical system failed.

Contact: dchiddister@ysnews.com